Winter and Diesel cars

Even without looking at the air pollution figures we know from the darkened sky-line that Delhi's air quality gains will be lost this winter. Air has begun to get heavy with dust, smoke and particles.

Calm and cool weather is blocking the dispersal of smoke and pollutants. Low-hanging shroud impairs visibility, chokes lungs. Winter is a seasonal statement of the growing pollution crisis, a cyclical reminder of our inability to put into action the real solutions.

The real problem remains and is growing - the exponential increase in vehicle numbers, with diesel cars as the dark horse of this neo-growth. Over the last 10 years, the total personal vehicle registration has recorded a staggering increase of 105 per cent. In the same period, cars alone have increased by 157 per cent -- an effect of excess indulgence in personal mobility. Shouldn't it shock to know that diesel cars during the same period have increased by 425 per cent? And that this overwhelming growth can be devastating in a city desperate for solutions to smoke, particles and NOx?

So what if Delhi has phased out 12,000 diesel buses to escape from the lethal effect of toxic diesel particles. Even at a very conservative estimate, the 118,631 diesel cars on the city's roads, is equivalent to adding particulate emissions from nearly 30,000 diesel buses!

This devious trend exposes contradictions and fissures in public policy. More diesel cars without a strict clean up target means more severe pollution; more diesel cars without a tax correction means more revenue losses; more diesel cars and cheap diesel under the garb of fuel efficiency means more induced driving, more oil guzzling; and more diesel cars and cheaper rides delay the entry of the ultra fuel-efficient and low emissions vehicles, like hybrids. Clearly, there is neither coherence nor foresight in the way the government is thinking about the future. It is a notion of growth without foresight that blindly overlooks the risks.

The government is refusing to see the implications. Public policy is distorting the car market in ways that the mitigation of its economic and health impacts will be well beyond the government's own capacity for managing, and reducing, the risks. In economic terms, the Finance ministry is mindlessly encouraging fiscal policies that will force the government to absorb colossal revenue losses on account of the 'luxury' consumption of diesel, without the ability to offset the public health costs.

There is no official anxiety over the fact that with diesel cars expected to be nearly 50 per cent of the new car sales by 2010 (compared to 20 per cent today), the government is in danger of progressively losing revenue from this segment. While the Union government earns Rs 14.74 from every litre of petrol used by a petrol car as excise, it earns a mere Rs 4.93 from a litre of diesel used by a diesel car. If we add both central and state fuel taxes, then with every new diesel car the government loses as much as Rs 12,000 annually, in relation to a petrol car. Its cumulative effect on a nation-wide scale is staggering -- enough to fund substantial refinery upgrades to produce clean diesel. It is amusing that while diesel car owners recover their premium for a diesel car within four years (given lower diesel fuel prices), the government shoulders t he massive losses as a subsidy to the rich, in perpetuity.

There is no clarity how the Indian government will manage the next phase of transition if diesel cars are allowed to dominate the automobile boom without clean emissions and fuel economy targets. This is a double loss -- Indian diesel cars emit nearly 50 per cent more PM and NOx and use 20 per cent more fuel than their comparable European counterparts.

Europe is an example of how complex the diesel predicament can get; India should be pre-warned. Making generous allowances to the diesel cars, Europe is delaying its transition to more stringent emissions standards. The particulate norms for diesel cars in Europe will close gaps with the US and Japan only in 2009 when Euro V will be enforced. But the NOx norms will catch up with Japan only in 2014 when Euro VI norms are expected to be enforced. But even then it will trail behind the US Tier 2 NOx norms by at least 43 per cent.

Diesel cars are becoming a decisive factor in the emissions regulations of Europe. The car industry in Europe has agreed to meet a stringent voluntary CO2 reduction target for the vehicle fleet (140 gm/km) by 2008. But they relied heavily on increasing the share of fuel-efficient diesel cars to meet this target. Some EU governments even encouraged diesel cars with favourable taxes. But the emissions norms for diesel cars remained lax, and particularly for PM and NOx emissions, the norms were kept more lenient than petrol cars. In the meantime, the US and Japan have surged ahead to set the most stringent emissions standards. Japan and California have also set fuel economy/CO2 targets. This gives them the opportunity to configure a wide variety of technology options, whereas Europe is so weighed down by what diesel can achieve.

The result: nearly half of all cars in Europe are on diesel today. Diesel penetration is as high as 70 per cent in Austria. The car industry is not even close to meeting their CO2 target (as evident from the European Commission's annual report on CO2 emissions from new cars). But many European cities crowded with diesel cars are at increased risk of violating the EU air quality targets for NOx, PM and ozone. Even though Europe has begun to get the world's cleanest diesel fuel with 10 ppm sulphur, the deeply entrenched diesel car business is slowing down the process of tightening emissions standards for diesel cars.

Diesel cars present a challenge of balance. There are inherent trade offs -- improving fuel efficiency may allow NOx emissions to deteriorate; it is also difficult to achieve substantial cuts in NOx and PM emissions while improving fuel efficiency. In fact, the emerging emissions control technologies may also offset fuel efficiency.

Ironically, the regions which have set more stringent emissions targets (such as US and Japan) will be more effective in pushing innovations in diesel technology than Europe's conservative norms. Europe stands to lose the opportunity to benefit from such innovation. Daimler Chrysler AG and Volkswagen AG, leading diesel carmakers in Europe are planning the launch of diesel cars in US in 2008. Honda Motor Co. will unveil diesel models for the US market by 2009. Considering the difference in emissions norms between the two regions then, European diesel models in the US will be nearly 80 per cent cleaner than their European counterparts.

India, choking on particulates and in danger from rapidly rising NOx, will have to avoid the current transition phase in Europe. In Asia, Hong Kong has already set an example by junking European diesel car norms and adopting more stringent Californian standards only for diesel cars. This growing disenchantment with European diesel car norms is significant in Asia, where the population under the influence of Euro norms is much larger than in Europe.

The growing Indian car market cannot be held captive to polluting diesel technology. India cannot allow diesel cars and their unresolved trade offs to decide its future trajectory. Remove the fiscal incentives for diesel cars and restrain their growth. Open up more options for advanced technologies by adopting fuel-neutral emissions norms. Take decision before a very long winter sets in.